Translation of separate financial statements originally issued in Spanish Note 18

Transcription

1 Intercorp Perú Ltd. Separate financial statements as of September 30, 2017, December 31, 2016 and for the nine-month periods ended September 30, 2017 and 2016

2 Intercorp Perú Ltd. Separate financial statements as of September 30, 2017, December 31, 2016 and for the nine-month periods ended September 30, 2017 and 2016 Contents Separate financial statements Separate statements of financial position Separate income statements Separate statements of other comprehensive income Separate statements of changes in equity Separate statements of cash flows Notes to the separate financial statements

3 Intercorp Perú Ltd. Separate statements of financial position As of September 30, 2017 and December 31, 2016 Note S/(000) S/(000) Assets Current assets Cash and due from banks 15(a) 15,744 1,826 Accounts receivable from Subsidiaries 3,668 2,197 Other accounts receivable 4, Total current assets 24,101 4,054 Available-for-sale investments 5 71, ,869 Investment property 6 137, ,660 Investment in Subsidiaries 7 8,045,788 7,433,752 Other assets 680 1,553 Total assets 8,279,455 7,703,888 Liabilities and equity, net Current liabilities Accounts payable to Subsidiaries and related companies 14(b) 27, ,221 Interest, provisions and other accounts payable 8 160,674 84,660 Notes issued 9-40,320 Total current liabilities 187, ,201 Corporate bonds 10 1,101,952 1,123,690 Total liabilities 1,289,714 1,374,891 Equity, net 11 Capital stock 3,524,799 3,041,307 Reserves 2,626,014 2,336,014 Unrealized results 275,401 (44,648) Retained earnings 563, ,324 Total equity, net 6,989,741 6,328,997 Total liabilities and equity net 8,279,455 7,703,888 The accompanying notes to the financial statements are an integral part of these statements.

4 Intercorp Perú Ltd. Separate income statements For the nine-month periods ended September 30, 2017 and 2016 Note S/(000) S/(000) Participation in income of Subsidiaries 7(b) 562, ,780 Income (expenses) Financial income 13 31,060 1,427 Financial expenses 13 (64,648) (67,692) General expenses (12,179) (12,045) Other expenses, net (22,485) (22,672) Impairment loss on available-for-sale investments - (293) (Loss) gain on derivative financial instruments 4 (3,150) 16,080 Exchange difference, net 27, Total expenses, net (43,917) (84,256) Net profit for the period 518, ,524 Earnings per share (A and B) basic and diluted, in Soles Weighted average number of outstanding shares (A and B), (in thousands) , ,019 The accompanying notes to the financial statements are an integral part of these statements.

5 Intercorp Perú Ltd. Separate statements of other comprehensive income For the nine-month periods ended September 30, 2017 and S/(000) S/(000) Net profit for the period 518, ,524 Other comprehensive income to be reclassified to the separate income statements in subsequent periods Available-for-sale investments: Net unrealized (loss) gain from available -for- sale investments (11,806) 5,950 Financial instruments of Subsidiaries Net variation of unrealized results in financial instruments of Subsidiaries, Note 7(b) 345, ,035 Exchange difference on translation of foreign operations, Note 7(b) (13,910) (2,621) Total other comprehensive income to be reclassified to the separate income statements in subsequent periods 320, ,364 Total other comprehensive income for the period 838, ,888 The accompanying notes to the financial statements are an integral part of these statements.

6 Intercorp Perú Ltd. Separate statements of changes in equity For the nine-month periods ended September 30, 2017 and 2016 Number of shares Unrealized results Issued Capital stock Reserves Available-for-sale investments Financial instruments of Subsidiaries Exchange difference on translation of foreign currency operations Retained earnings Total (in thousands) S/(000) S/(000) S/(000) S/(000) S/(000) S/(000) S/(000) Balance as of January 1, ,019 2,536,133 2,336,014 27,837 (379,715) 28,628 1,056,746 5,605,643 Net profit for the period , ,524 Other comprehensive income , ,035 (2,621) - 467,364 Total other comprehensive income , ,035 (2,621) 312, ,888 Declared dividends, Note 11(a) (101,700) (101,700) Capitalization of profits, Note 11(a) - 505, (505,174) - Others (19,044) (19,044) Balance as of September 30, ,019 3,041,307 2,336,014 33,787 84,320 26, ,352 6,264,787 Balance as of January 1, ,019 3,041,307 2,336,014 44,015 (109,637) 20, ,324 6,328,997 Net profit for the period , ,531 Other comprehensive income (11,806) 345,765 (13,910) - 320,049 Total other comprehensive income (11,806) 345,765 (13,910) 518, ,580 Declared dividends, Note 11(a) (97,335) (97,335) Capitalization of profits, Note 11(a) - 483, (483,492) - Transfer to reserves, Note 11(c) , (290,000) - Net variation of treasury stock held by Subsidiaries, net of dividends received, Note 7(b) (41,606) (41,606) Others (38,895) (38,895) Balance as of September 30, ,019 3,524,799 2,626,014 32, ,128 7, ,527 6,989,741 The accompanying notes to the financial statements are an integral part of these statements.

7 Intercorp Perú Ltd. Separate statements of cash flows For the nine-month periods ended September 30, 2017 and S/(000) S/(000) Reconciliation of net profit with cash provided by operating activities Net profit for the period 518, ,524 Plus (less) Participation in income of Subsidiaries (562,448) (396,780) Loss (gain) on derivate financial instruments 3,150 (16,080) Impairment loss on available-for-sale investments Net changes in asset and liability accounts (Increase) decrease of other accounts receivable (9,960) 24,402 Decrease of interest, provisions and other accounts payable (27,734) (8,092) Net cash used in operating activities (78,461) (83,733) Investing activities Dividends received 398, ,461 Loans collected from shareholder and related companies - 16,843 Capital contribution to Subsidiaries (189,532) (110,134) Sale of available-for-sale investments 38,364 46,643 Acquisition of investment property - (24,423) Net cash provided by investing activities 247, ,390 Financing activities Payment of notes (40,320) - Loans paid to Subsidiaries, net (121,585) (133,086) Loans received from third parties 80,000 - Payment of dividends (73,530) (76,455) Net cash used in financing activities (155,435) (209,541) Net cash increase 13,918 8,116 Balance of cash at the beginning of period 1,826 5,007 Cash at the end of period 15,744 13,123 The accompanying notes to the financial statements are an integral part of these statements.

8 Intercorp Perú Ltd. Notes to the separate financial statements As of September 30, 2017, December 31, 2016, and for the nine-month periods ended September 30, 2017 and Business activity, Group reorganization and acquisitions (a) Business activity- Intercorp Perú Ltd., (henceforth Intercorp Perú or the Company ) is a limited liability holding company incorporated in November 1997 in The Commonwealth of the Bahamas. Intercorp Perú performs as a holding of the group of Subsidiaries of the denominated Intercorp Group, thus coordinating their policies and management. Intercorp Perú also operates as an investment company, investing in all types of securities. The Company s legal address is Sassoon House Shirley Street & Victoria Avenue, Nassau, the Bahamas. Management and its administrative offices are located at Av. Carlos Villarán 140, La Victoria, Lima - Peru. The Company holds investments in a variety of entities domiciled mainly in Peru, in the Bahamas and in the Republic of Panama. The activities and the most important information about the Subsidiaries as of September 30, 2017 and December 31, 2016, are disclosed in Notes 2 and 8. The accompanying separate financial statements show the individual activity of Intercorp Perú, not including the effect of the consolidation with its Subsidiaries, in accordance with the legal rules and the International Financial Reporting Standards (henceforth IFRS ). The table below presents a summary of the consolidated financial statements of Intercorp Perú Ltd. and Subsidiaries as of September 30, 2017 and December 31, S/(000) S/(000) (Audited) Consolidated statements of financial position Total assets 64,025,032 63,708,858 Total liabilities 54,232,127 54,840,180 Equity attributable to Intercorp Perú s shareholders 6,989,741 6,328,997 Non-controlling interest 2,803,164 2,539, S/(000) S/(000) Consolidated income statements Net profit attibutable to Intercorp Peru s shareholders 518, ,524 Net profit attibutable to non-controlling interest 217, ,863 The accompanying separate financial statements were approved by Management on October 31, 2017, and audited financial statements as of December 31, 2016, were approved by the General Shareholders meeting held on April 11,

9 (b) Acquisition of Seguros Sura S.A. and Hipotecaria Sura Empresa Administradora S.A. - In May 2017, IFS signed a Share Purchase Agreement with Sura Asset Management S.A. (Colombia), Sura Asset Management Perú S.A. (Peru) and Grupo Wiese (Peru), for the direct and indirect acquisition of up to 100 percent of the shares of Seguros Sura S.A. (Peru) and Hipotecaria Sura Empresa Administradora Hipotecaria S.A. (henceforth the Transaction ). The businesses that will be incorporated into IFS under the transaction are mainly retirement annuities and individual life insurance operations. In September 2017, the General Shareholders Meeting IFS agreed on the issuance and placement of debt instruments for an outstanding amount of up to US$300,000,000, which are to be placed on the international and/or Peruvian market within the framework of Rule 144A and Regulation S of the U.S. Securities Act of 1933, with the purpose of aiming the obtained funds to the payment of the purchase price under the transaction. At the end of September 2017, the Superintendence of Banking, Insurance and AFPs (henceforth SBS, for its acronym in Spanish) approved the transaction. 2. Organization of Intercorp Perú Group Below is the information about the entities that are part of Intercorp Group Financial and insurance entities Intercorp Financial Services Inc. (henceforth IFS ) - It is a limited liability holding, incorporated in September 2006 in the Republic of Panama, in order to group the companies of Intercorp Group engaged in financial and insurance business. As of September 30, 2017 and December 31, 2016, the Company holds directly and indirectly percent of the issued capital stock of IFS and percent of the outstanding capital stock of IFS (as of December 31, 2016, the Company held direct and indirectly percent and percent, respectively). The percentage of indirect participation over capital stock of IFS is holds by Intercorp Perú through its Subsidiaries IFH Capital Corp. and Intercorp Capital Investment Inc., in which Intercorp Perú holds 100 percent of their capital stock and, at the same time, each of these subsidiaries hold 8.62 percent of capital stock of IFS. As of September 30, 2017 and December 31, 2016, IFS holds percent of the outstanding capital stock of Banco Internacional del Perú S.A.A. - Interbank and 100 percent of the outstanding capital stock of Compañía de Seguros - Interseguro S.A. and of the capital stock of Inteligo Group and San Borja Global Opportunities S.A.C. The Subsidiaries of IFS and their economic activities are presented below: (i) Banco Internacional del Perú S.A.A. - Interbank and Subsidiaries - Interbank is incorporated in Peru and is authorized by SBS, to operate as a universal bank in accordance with Peruvian legislation. Interbank s operations are governed by the General Act of the Financial and Insurance System and the Organic Act of the Superintendence of Bank and Insurance SBS Act (henceforth the Banking and Insurance Act ), that establishes the requirements, rights, obligations, restrictions and other operating conditions that Peruvian financial and insurance entities must comply with. 3

10 As of September 30, 2017 and December 31, 2016, Interbank had 276 and 282 offices, and a branch established in the Republic of Panama. Additionally, it holds 100 percent of the shares of the following Subsidiaries: Entity Interfondos S.A. Sociedad Administradora de Fondos Internacional de Títulos Sociedad Titulizadora S.A. - Intertítulos S.T. Inversiones Huancavelica S.A. Contacto Servicios Integrales de Créditos y Cobranzas S.A. Corporación Inmobiliaria de La Unión 600 S.A. Compañía de Servicios Conexos Expressnet S.A.C. IBK DPR Securitizadora Activity Management of mutual funds and investment funds. Management of securitization funds. Real estate activities. Collection services. Real estate activities. In October 2017, this company was absorbed by Interbank. At the date of the merger, the assets and equity, net absorbed amounted to approximately S/5,572,000. Services related to credit card transactions or products related to the brand American Express. A consolidated special purpose entity (SPE), by which Interbank issued negotiable long-term notes which matured in (ii) Interseguro Compañía de Seguros S.A. and Subsidiaries - Interseguro is incorporated in Peru and its operations are governed by the Banking and Insurance Act. It is authorized by the SBS to issue life and general risk insurance contracts. As of September 30, 2017 and December 31, 2016, Interseguro controls the following Subsidiaries: Entity Centro Comercial Estación Central S.A. Activity Administration of the "Estación Central Shopping Mall, located in downtown Lima. As of September 30, 2017 and December 31, 2016, Interseguro holds 75 percent of its capital stock and Real Plaza S.R.L, a Subsidiary belonging to the retail and real estate business of the Group (see Note 2.2), holds the remaining 25 percent. Empresa Administradora Hipotecaria IS S.A. Was incorporated in February 2014 in Peru. It does not have operations and is in the process of liquidation. As of September 30, 2017 and December 31, 2016, Interseguro holds 100 percent of its shares and it has a paid in capital of S/1. Likewise, Interseguro hold contributions in Patrimonio Fideicometido D.S EF, Interproperties Perú (henceforth Patrimonio Fideicometido Interproperties Perú ), that is a structured entity, incorporated in April 2008, and in which several investors (related parties to the Intercorp Group) contributed investment properties; each investor or investors have ownership of and specific control over the contributed investment property. For accounting purposes and under IFRS 10 Consolidated financial statements the assets included in said structure are considered silos, because they are ring-fenced parts of the wider structured entity (the Patrimonio Fideicometido - Interproperties 4

11 Perú). Intercorp Group has ownership of and decision making power over these properties, and the Group has the exposure or rights to their returns; therefore, the Group has consolidated the silos containing the investment properties that it controls. In the Universal Shareholders Meeting held on December 21, 2016, it was approved a project of simple reorganization between Interseguro and Mapfre Peru Vida Compañía de Seguros y Reaseguros S.A. (henceforth Mapfre, an unrelated party), through which Interseguro is commited to the acquisition of an equity block comprised of assets, liabilities, rights, obligations and legal matters related to an annuity retirement insurance policies portfolio issued by Mapfre. On May 24, 2017, the SBS authorized said reorganization. Consequently, Interseguro acquired a package comprising assets for S/182,704,000 and liabilities for the same amount. In that sense, there was not an increase in equity. On the other hand, in April 2016, the plenary session of Congress of the Republic of Peru approved an amendment to the Act of the Private Pension System, in which the affiliates of the Private Pension Fund Management Companies ( AFP - for its Spanish acronym) who are 65 years old and retire, can choose an additional retirement scheme in addition to the options in force, which are: a) Planned Retirement, managed by AFP; and b) the acquisition of an annuity retirement insurance plan, managed by a life insurance company; such is the case of Interseguro. This new retirement scheme allows the affiliate to dispose the 95.5 percent of their Individual Capitalization Account ( CIC, for its Spanish acronym). (iii) Inteligo Group Corp. and Subsidiaries - Inteligo Group Corp. is an entity incorporated in the Republic of Panama. As of September 30, 2017 and December 31, 2016, it holds 100 percent of the shares of the following Subsidiaries: Entity Inteligo Bank Ltd. Activity It is incorporated in The Commonwealth of the Bahamas and has a branch established in the Republic of Panama that operates under an international license issued by the Superintendence of Banks of the Republic of Panama. Its main activity is to provide private and institutional banking services mainly to Peruvian citizens. Inteligo Sociedad Agente de Bolsa S.A. - Brokerage firm incorporated in Peru. (iv) San Borja Global Opportunities S.A.C. Its corporate purpose is the acquisition and holding of shares and securities. As of September 30, 2017 and December 31, 2016, it did not have operations and had paid in capital of S/1,000. 5

12 2.2. Retail and real estate businesses (i) Intercorp Retail Inc.- It is a limited liability holding company, incorporated in the Republic of Panama in December 2010, in order to group the entities of Intercorp Group engaged in the retail business in Peru. As of September 30, 2017 and December 31, 2016, the Company holds 100 percent of the capital stock of Intercorp Retail Inc., which owns the following Subsidiaries: Entity InRetail Perú Corp. (As of September 30, 2017 and December 31, 2016, Intercorp Retail Inc. holds percent, of its outstanding capital stock. Also, Intercorp Perú, through its Subsidiaries, holds and percent, respectively (directly and indirectly) of InRetail Perú Corp. s outstanding capital stock. Activity Holding incorporated in the Republic of Panama in January 2011, which holds 100 percent of the capital stock of the following Subsidiaries, which operate several businesses: (a) Shopping malls: Developed by InRetail Real Estate Corp., owner of Patrimonio en Fideicomiso InRetail Shopping Malls, which in turn is owner of (i) Real Plaza S.R.L., (ii) Patrimonio en Fideicomiso D.S. No EF- Interproperties Holding and Patrimonio en Fideicomiso - D.S. No EF Interproperties Holding II, equity trusts which are special-purpose entities; see description in paragraph 2.2(v); (b) Patrimonio en Fideicomiso Inretail Consumer: Equity trust incorporated in August 2014, which develops the following retail businesses: (i) Supermarkets: Developed by Supermercados Peruanos S.A. and Subsidiaries, a company that, as of September 30, 2017 and December 31, 2016, operates stores under the trademarks Plaza Vea, Plaza Vea Súper, Vivanda, Mass. (ii) Pharmacies: Developed by Eckerd Perú S.A. and Subsidiaries, a company that, as of September 30, 2017 and December 31, 2016, operates 1,155 and 1,020 stores, under the trademark Inkafarma. (c) InRetail Management S.R.L., company dedicated to the administration of personnel and operations of the aforementioned equity trusts. IFH Retail Corp. (As of September 30, 2017 and December 31, 2016, Intercorp Retail Inc. holds and percent of its capital stock) Holding incorporated in the Republic of Panama in September 2006, owner as of September 30, 2017 and December 31, 2016, of and percent, respectively, of Tiendas Peruanas S.A. and Subsidiaries, see Note 2.2 (ii), a company engaged in retail business through department stores under the trademark Oeschle (23 and 24 premises as of September 30, 2017, and December 31, 2016, respectively) and of 96 percent of Financiera Oh! S.A., as of September 30, 2017 and December 31, 2016, a company that provides financial support to the companies of Intercorp Group dedicated to the retail business. 6

13 Entity Activity HPSA Corp. (As of September 30, 2017 and December 31, 2016, Intercorp Retail Inc. holds percent of its capital stock) Holding incorporated in the Republic of Panama, owner of Homecenters Peruanos S.A. and Subsidiary, a company engaged in the operation of the business of home improvement stores under the trademark Promart (23 stores as of September 30, 2017 and December 31, 2016). Lince Global Opportunities Corp. (As of September 30, 2017 and December 31, 2016, Intercorp Retail Inc. holds 100 percent of its capital stock) Holding incorporated in the Republic of Panama in December 2010, which holds percent of the capital stock of Inmobiliaria Milenia S.A., a company engaged in the real estate business. (ii) Callao Global Opportunities - Subsidiary of Intercorp Perú, incorporated in 2011 as a limited liability holding company in the Republic of Panama. As of September 30, 2017 and December 31, 2016, the Company holds and percent, respectively, of the capital stock of Tiendas Peruanas S.A. and Subsidiaries. On the other hand, as indicated in Note 2.2(i), Intercorp Perú holds and percent of IFH Retail Corp., as of September 30, 2017 and December 31, 2016, respectively which, in turn, holds and percent of Tiendas Peruanas S.A., and therefore the joint shareholding of Intercorp Perú in Tiendas Peruanas through to IFH Retail and Callao Global Opportunities is equivalent to and percent of its capital stock as of September 30, 2017 and December 31, 2016, respectively. (iii) Intercorp Investments Perú Inc.- It is a limited liability holding company incorporated in September 2006 in the Republic of Panama. As of September 30, 2017 and December 31, 2016, the Company holds 100 percent of its capital stock. Intercorp Investments Perú Inc. is the sole shareholder of Horizonte Global Opportunities Corp., a holding company incorporated in the Republic of Panama, owner of Horizonte Global Opportunities Perú S.A.C., whose sole asset is a land lot located in the district of Independencia in Lima. (iv) Urbi Propiedades S.A. - As of September 30, 2017 and December 31, 2016, the Company holds 100 percent of the capital stock of this entity, incorporated in Peru in 1998, engaged in real estate management and in the provision of structuring and real estate project management. In addition and through its Subsidiaries, it is developing a number of real estate projects. In January 2016, Urbi Propiedades S.A split an equity block in the amount of S/6,019,000 in favor of Urbi Proyectos S.A., Subsidiary of Intercorp established in September 2015 engaged in real estate projects. 7

14 As of September 30, 2017 and December 31, 2016, Urbi holds 100 percent of the following Subsidiaries: Entity Alameda Colonial S.A. Domus Hogares del Norte S.A. Club de Socios S.A. Urbi Solutions S.A.C. Activity Incorporated in Lima in May 2006, to build apartments under the Government s program Mi Vivienda. Incorporated in Lima in June 2009, to develop a real estate project called Domus Hogares del Norte. Incorporated in Lima in August 2007 in order to engage in the management, administration and organization of recreational, sports and social activities, among others. As of September 30, 2017 and December 31, 2016, Urbi Propiedades S.A. and Intercorp Perú hold and percent of the capital stock of this entity. Incorporated in Lima in June 2014 to engage in the construction of real estate projects. (v) Patrimonio en Fideicomiso D.S. No EF, Interproperties Holding and Interproperties Holding II - In September 2011 and May 2012, Patrimonio en Fideicomiso D.S. No EF, Interproperties Holding and Patrimonio en Fideicomiso D.S. No EF, Interproperties Holding II (henceforth and collectively Interproperties Holding ) were incorporated with the purpose of creating autonomous equity trusts, independent from each investor constituted as originator. Through these equity trusts, investments in real estate projects are made, and their yields back (i) the certificates of participation issued, and (ii) the compliance with other obligations assumed directly or through third parties in order to obtain the resources that are necessary to make said investments. As of September 30, 2017 and December 31, 2016, the company that consolidates financial information with Intercorp Perú and that holds 100 percent of the participations in Interproperties Holding is InRetail Perú Corp. Through these equity trusts Intercorp Group holds the ownership of the property where the shopping malls called Real Plaza operate. As of September 30, 2017 and December 31, 2016 there were 21 shopping malls located in the cities of Chiclayo, Trujillo, Huancayo, Arequipa, Juliaca, Nuevo Chimbote, Huánuco, Cajamarca, Piura, Pucallpa, Cusco, Sullana and Lima. (vi) Intercorp Re Inc. - It is a limited liability holding incorporated in August 2015 in the Republic of Panama. As of September 30, 2017 and December 31, 2016, the Company holds 100 percent of its capital stock and, in turn, Intercorp Re Inc. is the sole shareholder of Inteligo Real Estate Corp., a holding company incorporated in the Republic of Panama, owner of Inteligo Real Estate Perú S.A.C. 8

15 2.3. Educational business - (i) NG Education Holdings Corp. - It is a limited liability holding company incorporated in January 2011 in the Republic of Panama, whose purpose is to group the Subsidiaries of Intercorp Group engaged in the educational business in Peru. During 2016, NG Education Holdings Corp. sold 50 percent of its participation in Colegios Peruanos (equivalent to 10,585,563 shares) to NG Education Holdings IV Corp. (a related entity). After this operation, NG Education Holdings Corp. reduced its capital. As of September 30, 2017 and December 31, 2016, Intecorp Perú holds and percent of its the capital stock, respectively. As of September 30, 2017, NG Education S.A.C., Subsidiary of NG Education Holdings Corp. acquired the entire non-controlling interest of Universidad Tecnológica del Perú S.A.C.; there by become the sole shareholder of this Subsidiary. NG Education Holdings Corp. is the owner of the following Subsidiaries: Entity Colegios Peruanos S.A. (As of September 30, 2017 and December 31, 2016 NG Education Holdings Corp. holds and percent, respectively of its capital stock, respectively). Activity As of September 30, 2017, it operates 41 schools under the trademark Innova Schools (35 schools as of December 31, 2016). NG Education S.A.C. (As of September 30, 2017 and December 31, 2016, NG Education Holdings Corp. holds and percent, respectively of its capital stock) Holding incorporated in Peru in November NG Education S.A.C. holds 100 percent (50 percent plus one share as of December, 31, 2016) of the following Subsidiaries: (a) Universidad Tecnológica del Perú S.A.C.: Incorporated in Lima in February It has the following 3 business units: UTP University, IDAT Institute, Post-Graduate School. (b) Promotora de la Universidad Tecnológica de Chiclayo S.A.C.: An entity with operations in Peru which as of September 30, 2017 and December 31, 2016, has 1 premise. 9

16 (ii) NG Education Holdings II Corp. - It is a limited liability holding company incorporated in October 2013 in the Republic of Panama. As of September 30, 2017 and December 31, 2016, Intercorp Perú holds 50 percent of the capital stock of NG Education Holdings II Corp., which in turn owns the following Subsidiary: Entity Servicios Educativos Perú S.A.C. (As of September 30, 2017 and December 31, 2016, NG Education Holdings II Corp.holds 100 percent of its capital stock) Activity Company incorporated in Peru in October As of September 30, 2017 holds 100 percent of the capital stock of Servicios Educativos Empresariales S.A.C., (80 percent as of December 31, 2016) incorporated in Lima in February 2012, which operates 4 premises under the trademark Zegel-IPAE. (iii) NG Education Holdings III Corp. It is a limited liability holding company incorporated in July 2013 in the Republic of Panama. As of September 30, 2017 and December 31, 2016, Intercorp Perú holds and percent, respectively, of its capital stock and, in turn, it holds and percent as of September 30, 2017 and December 31, 2016, respectively, of the capital stock of Colegios Peruanos S.A Other entities As of September 30, 2017 and December 31, 2016, the Company holds 100 percent of the capital stock of the following Subsidiaries: Company Activity Country of incorporation Inversiones Río Nuevo S.A.C. Real estate business Peru San Miguel Global Opportunities S.A.C. Real estate business Peru Intercorp Management S.A.C. Administrative services Peru Puente de San Miguel Arcángel S.A. Holding Republic of Panama Centro Cívico S.A. Real estate business Peru Ronepeto S.A. Real estate business Peru La Punta Global Opportunities Corp. Specialized investments Republic of Panama Urbi Proyectos S.A. Real estate projects Peru Beacon Healthcare S.A.C. Specialized investments Peru 3. Significant accounting principles and practices The accompaying separate financial statements have been prepared based on accounting records of Intercorp Perú, in accordance with the IFRS as issued by the International Accounting Standards Board (henceforth IASB ). The accounting principles and practices as of September 30, 2017 are consistent with respect to the rules applied as of December 31, 2016, and are included in the audited financial statements dated March 24,

17 4. Foreign currency transactions and foreign exchange risk exposure Transactions in foreign currency are performed by using exchange rates prevailing on the free market. As of September 30, 2017, the weighted average exchange rate of free market per US Dollar was S/3.263 for buying and S/3.267 for selling (S/3.352 and S/3.360 as of December 31, 2016, respectively). As of September 30, 2017, the exchange rate for the accounting of assets and liabilities accounts in foreign currency set by the SBS was S/3.265 per US$1 (S/3.356 as of December 31, 2016). The table below presents the detail of the Company s foreign currency assets and liabilities, stated in US Dollars as of September 30, 2017 and December 31, 2016: US$(000) US$(000) Assets Cash and due from banks 4, Accounts receivable from subsidiaries Other accounts receivable 1, Available-for-sale investments 10,541 28,239 Other assets ,708 28,711 Liabilities Accounts payable to Subsidiaries and related companies 7,500 1,035 Interest, provisions and other accounts payable 18,550 18,563 Notes issued - 12,000 Corporate bonds 246, , , ,451 Liability position, net (255,497) (248,740) As of September 30, 2017 and December 31, 2016, the Company does not have operations with derivative financial instruments for hedging or trading purposes. Consequently, the exchange risk of this position at said date is assumed by the Company. During 2017, the Company signed two foreign currency forward contracts, designated as a financial instrument for trading purposes, with its subsidiary Interbank and with maturity in May 2017 for a nominal amount of approximately US$100,000,000. As a result, the Company recorded losses amounting to approximately S/3,150,000 as of September 30, During 2016, the Company signed a foreign currency forward contract, designated as a financial instrument for trading purposes, with its subsidiary Interbank and with maturity in May 2016 for a nominal amount of approximately US$80,000,000. As a result, the Company recorded gains amounting to approximately S/16,080,000 as of September 30,

18 Notes to the financial statements (continued) 5. Available-for-sale investments (a) As of September 30, 2017 and December 31, 2016, this caption is made up as follows: Unrealized amount Unrealized amount Amortized cost Gains Losses Fair value Amortized cost Gains Losses Fair value S/(000) S/(000) S/(000) S/(000) S/(000) S/(000) S/(000) S/(000) Foreign mutual funds participations (b) 4,059 13,012-17,071 41,122 35,560-76,682 Foreign investment funds participations (c) 18,120 19,157-37,277 18,120 16,110-34,230 Global Bonds of the Republic of Peru (d) 16, ,772 17, ,673 38,911 32,209-71,120 76,785 51, ,585 Add Accrued interest , ,869 (b) As of September 30, 2017, the Company redeemed its participation in Second Curve Partners International, Ltd., at fair value for approximately S/67,778,000 (US$20,893,000). At the date of liquidated, the unrealized gain amounted to S/30,715,000 and was recorded in equity accounts. As a result of the liquidation, such amount was reclassified to the caption Financial income of the separate income statements, see Note 13. (c) It corresponds to participations in NG Capital Partners, a related investment fund domiciled in Canada and engaged in investing mainly in entities established in Peru. (d) As of September 30, 2017 and December 31, 2016, the Company holds Global Bonds of the Republic of Peru are denominated in US dollars with maturity in March 2019 that accrued interest at annual effective annual rate of percent. As of September 30, 2017 and 2016, these bonds bore interests for approximately S/312,000 and S/553,000, respectively; that are presented in the caption Financial income of the separate income statements; see Note

19 Notes to the financial statements (continued) 6. Investment property Corresponds to a land lot acquired from third parties during 2015, located in the district of San Martín de Porres, Lima, whose ownership is represented by Certificates of participation issued by Interproperties Perú. The fair value of the land lot is determined on the basis of the value assigned by an external appraiser. The external appraiser uses the comparable market method, whereby the fair value of a property is estimated on the basis of comparable transactions. The unit of comparison applied by the Company is the price per square meter. 7. Investments in Subsidiaries (a) As of September 30, 2017 and December 31, 2016, this caption is made up as follows: Entity Direct and indirect ownership Equity value % % S/(000) S/(000) Intercorp Financial Services Inc. and Subsidiaries ,047,001 3,634,566 Intercorp Retail Inc. and Subsidiaries ,122,751 3,001,490 NG Education Holdings Corp. and Subsidiaries , ,676 La Punta Global Opportunities Corp , ,216 Callao Global Opportunities Corp ,880 92,632 Intercorp Investments Perú Inc. and Subsidiaries , ,450 Intercorp RE Inc. and Subsidiaries , ,898 San Miguel Global Opportunies S.A.C ,436 65,629 NG Education Holdings III Corp ,521 24,728 Urbi Propiedades S.A. and Subsidiaries ,901 58,250 NG Education Holdings II Corp. and Subsidiaries ,259 8,213 Other Subsidiaries - - 9,386 5,004 8,045,788 7,433,752 13

20 Notes to the financial statements (continued) (b) The table below presents the movement of the investments in Subsidiaries for the nine-month periods ended September 30, 2017 and 2016: S/(000) S/(000) Balance as of January, 1 7,433,752 6,736,887 Participation in income of Subsidiaries 562, ,780 Dividends received in cash or declared by Subsidiaries (i) (398,982) (372,461) Net variation of unrealized results in financial instruments of Subsidiaries 345, ,035 Capital contribution in Subsidiaries (ii) 189, ,134 Exchange difference on translation of foreign operations (13,910) (2,621) Net variation of treasury stock held by Subsidiaries, net of dividends received (41,606) - Others (31,211) (18,967) Balance as of September, 30 8,045,788 7,313,787 Balance as of December, 31 7,433,752 (i) During the nine-month periods ended September 30, 2017 and 2016, the Company recorded dividends from the following Subsidiaries: S/(000) S/(000) Intercorp Financial Services Inc. 354, ,961 Inretail Perú Corp. 6,427 - Intercorp Retail Inc. 37,747 - Intercorp Investments Perú Inc. - 3, , ,461 14

21 Notes to the financial statements (continued) (ii) During the nine-month periods ended September 30, 2017 and 2016, the Company made capital contributions, in cash, to the following Subsidiaries: S/(000) S/(000) NG Education Holdings III Corp. 46,852 46,121 Callao Global Opportunities Corp. 40,000 - La Punta Global Opportunities Corp. 35,749 42,142 NG Education Holdings Corp. 21,065 - Intercorp Management S.A.C. 18,300 11,214 Others 27,566 10, , , Interest, provisions and other accounts payable (a) As of September 30, 2017 and December 31, 2016, this caption is made up as follows: S/(000) S/(000) Loans payable (b) 82,053 - Dividends payable, Note 11(a) 49,005 25,200 Investment property acquisition (c) 13,261 12,826 Interest payable on corporate bonds, Note 10 9,604 28,096 Other accounts payable and provisions 6,751 16,414 Interest on notes issued, Note 9-2, ,674 84,660 (b) As of September 30, 2017, it corresponds to loans in soles with various mutual funds managed by Interfondos SAFM, a related company, which bears interest at market rates, short-term maturity and did not have specific guarantees. (c) As of September 30, 2017 and December 31, 2016, corresponds to the account payable for the land lot acquired from third parties during the year 2015, located in the district of San Martín de Porres; see Note 6. 15

22 Notes to the financial statements (continued) 9. Notes issued (a) As of December 31, 2016, the notes issued correspond to non-subordinated obligations amounting which do not present specific guarantees and were placed through private offers. The table below presents the characteristics of the current issued notes: Amount of issuance US$12,000,000 Date of issuance May 4, 2016 Currency US Dollars Maturity May 4, 2017 Interest rate 8.000% Interest payment At maturity (b) During 2017 and 2016, the Company recognized interests for approximately S/1,067,000 and S/2,421,000, respectively, which are presented in the caption "Financial expenses" of the separate income statements; see Note

23 Notes to the financial statements (continued) 10. Corporate bonds (a) This caption is made up as follows: Issuances Issuance year Annual interest rate Interest payment Maturity Issuance amount % (000) S/(000) S/(000) Senior bonds (b) Semiannually February 12, 2025 US$ 250, , ,099 Senior bonds (b) Semiannually February 10, 2030 S/. 301, , ,591 1,101,952 1,123,690 (i) In February 2015, the Company made a private offering in the local and international market of Senior Notes due 2025 and Senior Notes due 2030 for US$250,000,000 and S/301,500,000, respectively. Issuance expenses amounted to approximately S/18,800,000, which are presented as an issued bonds deduction; as of September 30, 2017 and December 31, 2016, approximately S/3,410,000 and S/2,324,000, respectively, have accrued as part of the interest rate. Funds obtained from these issuances were used mainly for: - Redemption of corporate bonds 8.625% Secured Notes due 2019 issued by Intercorp Perú and payment of the premium for the repurchase of said bonds, see Note Payment of other financial obligations. (b) As of September 30, 2017, the Company recognized interest income for approximately S/54,121,000 (approximately S/57,143,000 in the same period 2016), which are recorded in the caption "Financial expenses" of the separate income statements; see Note 13. Likewise, as of September 30, 2017, and December 31, 2016, interest payable is presented in the caption Interest, provisions and other accounts payable ; see Note 8. 17

24 Notes to the financial statements (continued) 11. Equity (a) Capital stock - As of September 30, 2017 and December 31, 2016, the Company s capital stock was represented by 14,901,892 Class A shares and 134,117,024 Class B shares. Both classes of shares have the same economic rights. The difference between them is that Class A shares grant the right to choose the majority of the Board of Directors members (5 directors), while Class B shares can choose one director. The shareholding structure of the Company as of September 30, 2017 and December 31, 2016 is presented below: Shareholders Class A shares: Total participation percentage % International Financial Holding Inc Southern Hill Corp Class B shares: Bank of New York - ADR Programs International Financial Holding Inc Shetland Securities Inc Southern Hill Corp Other minor The General Shareholders Meeting held on April 11, 2017, agreed to capitalize approximately S/483,492,000. As a result, the nominal value per share was modified from US$7.00 to US$8.00, while the number of shares was kept the same. Likewise, it was agreed to distribute dividends for US$30,000,000 (equivalent to approximately S/97,335,000), which will be paid in four equal installments (US$7,500,000) from June, 2017 to March, The General Shareholders Meeting held on April 14, 2016, agreed to capitalize approximately S/505,174,000. As a result, the nominal value per share was modified from US$6.00 to US$7.00, while the number of shares was kept the same. Likewise, it was agreed to distribute dividends for US$30,000,000 (equivalent to approximately S/101,700,000), which will be paid in four equal installments (US$7,500,000) from June, 2016 to March, (b) Regulatory capital - Intercorp Group s regulatory capital Intercorp Perú must meet certain capital requirements as well as global and concentration limits set out in the Regulation on Consolidated Supervision of Financial and Mixed Conglomerates, approved on September 29, 2010, by the SBS through Resolution No , as amended. As of September 30, 2017, and December 31, 2016, the Company has met the aforementioned requirements. 18

25 Notes to the financial statements (continued) (c) Reserves - At the Board Meeting held on September 18, 2017, it was agreed to constitute reserves charged to accumulated profits to the sum of S/90,000,000 as of June 30, At the Board Meeting held on June 30, 2017, it was agreed to commit the capitalization of the accumulated profits of 2016 to the sum of S/200,000,000. (e) Unrealized results - Unrealized results correspond to those generated by the fluctuation of available-for-sale investments held by the Company and the valuation of financial instruments held by Subsidiaries in the application of the equity method for the recording of investments. 12. Tax situation (a) The Company and its Subsidiaries incorporated and domiciled abroad are not subject to any Income tax or any taxes on capital gains, equity or property. The Subsidiaries of the Company incorporated and domiciled in Peru are subject to the Peruvian Tax legislation; see paragraph (b). On the other hand, it is considered as Peruvian-source income those arisen from the indirect sale of shares of stock or ownership interests of legal entities domiciled in the country. For that purpose, an indirect sale shall be considered to have occurred when shares of stock or ownership interests of a legal entity are sold and this legal entity is not domiciled in the country and, in turn, is the holder whether directly or through other legal entity or entities of shares or ownership interests of one or more legal entities domiciled in the country, provided that certain conditions established by law occur. The law also defines the assumptions under which the legal entity domiciled en Peru is jointly and severally liable. In this sense, the Income Tax act establishes that a case of indirect transfer of shares occurs when, in any of the twelve (12) months prior to the sale, the market value of the shares or ownership interests of the domiciled legal entity is equivalent to 50 percent or more of the market value of the shares of stock or ownership interests of the non-domiciled legal entity. Likewise, as a concurrent condition, is established that, in any 12-month period, shares or ownership interests that represent 10 percent or more of the capital stock of a non-domiciled legal entity shall be sold. (b) The Group s Subsidiaries incorporated in Perú are subject to the payment of Peruvian Taxes; hence, they must calculate their tax expenses on the basis of their separate financial statements. As of September 30, 2016, the applicable Income Tax rate was 28 percent on the taxable income. On the other hand, through Legislative Decree No.1261, published on December 10, 2016, the rate applicable to the third category Income Tax of domiciled taxpayers was modified, establishing a rate of 29.5 percent which shall be effective starting on January 1,

26 Notes to the financial statements (continued) (c) The Tax Authority (henceforth SUNAT by its Spanish acronym) is legally entitled to perform tax audits procedures for up to four years subsequent to the date on which the tax return regarding a taxable period must be filed. It is also entitled to challenge the Income Tax assessment performed by taxpayers in their tax returns. The following tax periods of the main Subsidiaries are pending review by SUNAT: Income tax IGV (Value Added Tax) Banco Internacional del Perú S.A.A. - Interbank 2012 to to 2016 Interseguro Compañía de Seguros S.A to to 2016 Supermercados Peruanos S.A to to 2016 Universidad Tecnológica del Perú S.A.C to to 2016 Tiendas Peruanas S.A.C. 2012, 2013, 2015 and to 2016 Colegios Peruanos S.A.C to to 2016 Homecenter Peruanos S.A.C to to 2016 Eckerd Perú S.A to to 2016 Boticas del Oriente S.A.C to to 2016 Eckerd Amazonía S.A.C to to 2016 Financiera Oh! S.A. 2012, 2014 to to 2016 Inmobiliaria Milenia S.A. 2012, 2015 and to 2016 Urbi Propiedades S.A to to 2016 Real Plaza S.R.L to to 2016 InRetail Management S.R.L. 2012, 2013, 2015 and to 2016 (d) On the other hand, on April 2004, June 2006, February 2007, June 2007, November 2007, October 2008 and December 2010, Interbank was notified with Tax Assessments and Fine Imposing Resolutions regarding mainly the assessments of the Income Tax years 2000 to 2006, for which it filed Tax Claims and Tax Appeals. In March 2009, August 2010 and December 2011, SUNAT issued Intendancy Resolutions regarding tax years 2000 to 2006 for which Interbank filed the corresponding appeals. In December 2014, SUNAT issued the Resolution of Intendancy N declaring partly founded the appeal filed by the Bank corresponding to the 2001 Income Tax. On the part not accepted by SUNAT, Interbank filed a new appeal. On February 29, 2016, Interbank obtained the Tax Court Resolution N , which declares as partially founded the case concerning to the 2001 Income Tax. In February 2017, the Lima s Superior Court of Justice declared invalid the judgment in first instance ordering the judge to re-issue a new decision about the case concerning to the 2002 Income Tax. In September 2017, Interbank obtained the Tax Court Resolution N , which declares as partially founded the case concerning to the 2004 Income Tax. Also, for the period 2013, Interbank is in the process of auditing by SUNAT. In the opinion of Management and its legal advisors, any possible additional tax assessment would not have any material consequences on the Bank s financial statements as of September 30, 2017 and December 31,

27 Notes to the financial statements (continued) During the years 2013, 2014 and 2017 SUNAT closed the audit processes corresponding to the assessment of the Income Tax of tax years 2007, 2008, 2009 and 2010, respectively, thus issuing a series of Assessment Resolutions without any additional settlement of said tax. In January 2016, SUNAT concluded the partial audit/inspection proceeding corresponding to the fiscal year 2013 for withholding of Income Tax from non-domiciled beneficiaries of Interbank, issuing a series of Final Assessment Resolutions without any additional payment of the tax in question. In February 2017, SUNAT concluded the inspection process corresponding to the 2010 Income Tax; and as result, no additional payments of such tax were determined. Supermercados Peruanos S.A. has been audited by SUNAT on its Income Tax returns and its monthly Value Added Tax (henceforth IGV, by its Spanish acronym) returns for the years from 2004 to Said audits resulted in Assessment Resolutions generating higher tax payments, fines and interest. The resolutions issued for the years 2004 to 2009 have been challenged and these cases are pending at the Tax Court. In the opinion of Management, the resolutions issued for tax year 2010 will be appealed before SUNAT within the deadline established by law. Eckerd Amazonía S.A.C. filed claims against several Assessment Resolutions on supposed omissions of IGV from January 2003 to June In the opinion of Management of the Company and the Subsidiary, as well as in the opinion of its legal advisors, no important liabilities will be generated as of September 30, 2017 and December 31, UTP S.A.C. maintains several lawsuits (labor and civil) and contentious administrative procedures with different municipalities and SUNAT. In the opinion of Management of the Company and the Subsidiary, as well as in the opinion of its legal advisors, these legal actions will not generate important liabilities for the financial statements. Since tax regulations are subject to interpretation by SUNAT, it is not possible to determine to date whether such tax audits procedures may result in additional liabilities for the Group s Subsidiaries or not; therefore, any unpaid tax, penalties or interest that might result from said audit procedures will be recorded as expenses in the year in which they are assessed. Nevertheless, Management and its legal advisors consider that any additional tax assessment would not have a significant impact on the consolidated financial statements as of September 30, 2017 and December 31, (e) Peruvian life insurance companies are exempt from Income Tax regarding the income derived from assets linked to technical reserves for pension insurance (retirement, disability and survival pensions) and annuities from the Private Pension Fund Administration System. 21